There is an assertion or point of view out there growing in popularity that needs to be dispelled. It goes as follows: Cable ratings don’t matter that much to WWE.
This is not true. Not even close to true.
Wade Keller, editorOn Twitter last week, WWE employee Brian James (a/k/a Road Dogg) said ratings are an archaic measurement of how business is going and of the popularity of the current product.
Evan Bourne told Sports Illustrated:
“I understand that ratings are important. You have to realize WWE’s contract. They’re not getting paid from advertising money. USA makes that money. WWE gets paid by USA, they get paid a lot of money, and the money increases every year. Ratings aren’t the most important thing to them. And, let’s just be honest: ratings aren’t as precise as internet clicks and time spent on the website. If you look at that, WWE is crushing everyone. So I think ratings might not be the best metric with which to rate wrestling in this day and age. But it does mean they’ve got big distribution.â€
Let me at least put this out there first, because it’s probably the most important point, and if you read no further, you’ll still get 98 percent of why the above is nonsense:
This fall, a smaller percentage of people with access to cable TV on Monday nights in 18 years are choosing to watch Raw live, and the decline since the peak of the Monday Night War has taken a sharp nosedive over the last year compared to any year-to-year period in many years.
Full article: http://www.pwtorch.com/site/2015/12/05/keller-low-raw-ratings-are-a-bad-thing-they-count/
Hopefully people can stop pretending that WWE still rakes in a **** load of money despite low ratings.
Their TV contracts are determined by their ratings. The lower their ratings, the less money they're going to get and their contract for Monday Night Raw is up for renewal in 2016. They already set expectations high during their last round of negotiations and when the $$ was less than expected, their stock took a hit. It's about to be a worse TV deal for them if the ratings don't turn around, and with 40-percent of WWE's revenue coming from TV deals, that's a big deal. That's the largest part of their revenue stream right now, as Keller indicates in his article.
TV isn’t just one of the Big Three revenue generators, it’s the most important of the Big Three because (a) it’s the biggest; and (b) it’s what drives the other two. More specifically, TV rights fees equal 40 percent of WWE revenue, Network subs total 25 percent, and house show tickets sales and venue merchandise sales equals 18 percent of revenue. So low ratings means WWE is going to have to brace for a huge drop in TV rights fees next time they negotiate a contract, and in the mean time, fewer people are being reached as potential Network and house show customers.
